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2015 media will be a year of tools, technology and transformation

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This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

Last year for the MediaScope Predictions, I stated that 2014 was the Year Zero. And while we never actually hit rock bottom, (although it got close) it was a year when the issue of downward pressure on agency fees and media rates came to a head with the issue breaking out into the industry for all to see.

Hopefully we have seen the worst and we begin to address the issues associated with the race to zero. But this trend will only be put behind us if we will focus on solutions and not just the consequences. And while cost will always be a factor, as no advertiser wants to pay more than they should, there will be more opportunities in the year ahead for agencies to not only deliver value, but prove their value.

Technology

Technology and the tools being developed are providing marketers with more opportunities to engage with consumers than ever before. These tools and systems not only produce more data on consumers and their behaviour but it also allows marketers to be able to more specifically target and customise or personalise those communications in real time.

The concept of Big Data was the catch cry last year. In the coming year the focus will be equally on the ability to customise (or optimise) the consumer brand experience based on their needs and profiles extracted from the data insights.

Equally importantly for media, is the ability to track consumer responses and ultimately performance across multiple channels.

What is required to make this happen?

Media agency groups are already investing heavily in data and technology platforms and solutions. In fact the high cost of this investment is favouring the holding company media agencies over their smaller independents as they are able to amortise the cost of this investment over a larger number of agency brands and advertisers.

Many smaller independent media agencies are finding the cost of entry into the category has significantly increased with this expectation of having the same data and trading tools their holding company competitors offer.

The next step is for the media agency to be the point where all of this data comes together, the media owner and publisher data, the agency trading data and consumer behaviour data and the advertiser customer data in a Data Management Platform (DMP) managed by the media agency.

Performance

Performance media is the trend, made possible by the increasing use of tools and technology such as DMP, Trading Desks, DSPs and the like.

It is now possible for media agencies to optimise all media channels against the audience required and then monitor consumer responses to maximise the performance of that media in real time if required. For advertisers with specific requirements of their media (awareness, leads, sales, site visits, product trials and the like) it means that you can now measure and reward the agency based on their contribution to delivering your specific results and outcomes.

Being able to access, analyse and use this to inform media choices and trades and then measure and learn in real time to optimise these strategy choices is the essential transformation occurring in the category.

Hopefully with it we will see the end of media audits on cost alone as more and more advertisers embrace the opportunity to invest their media based on performance and reward agencies not for the cost but the returns on that investment.

What is required to make this happen?

Many agencies and advertisers have moved to performance based compensation in the media space. More so than in the creative and digital category. This is usually a bonus on top of the agency fee for achieving results (often defined by relationship or service performance, to media buying performance through to leads, sales and other financial metrics) above expectation.

The next stage is that with the ability to measure, manage and maximise media performance in delivering specific outcomes, more advertisers can start remunerating (rewarding) their media agency as they would a direct response agency with payment for leads or sales rather than resources used or hours required.

Ultimately we could see a move to no longer paying for media by the eyeball, the minute, the column centimetre, but by the result for the advertisers such as per acquisition or per lead.  This is the ultimate in performance based media advertising.

Transformation

In November, my colleague in the US, Avi Dan wrote in his column in Forbes, that one of the big five trends to watch is media agencies stepping up to the opportunity. Four years ago I called this the Hollywood model, where the media agencies, like the movie studios, become the central strategic hub that develops the strategies, procures the content from independent producers and then manages, measures and maximises the advertisers return on their investment.

The creative, digital and other agencies act as the content producers for the specific channels selected by the media agency, in the same way independent producers in Hollywood produce feature films and movies to fulfil the scheduling needs of the studio.

What is required to make this happen?

First, the level of trust between media agencies and their advertiser clients needs to be strengthened and in some cases repaired. The practices of rebates, secret commissions, value banks and the like, plus the lack of transparency around trading desks means that increasingly marketers do not trust their media agencies like they once did. This is not a great situation for a relationship where millions of dollars are transacted.

Next holding companies need to look beyond their significant investment in creative and digital agencies and be willing to allow the media agencies to take the lead. After all, while both content and channel are important, increasingly data insights are driving advertising and marketing performance. And who better placed than the media agencies to be at the centre of this performance engine.

Plus media agencies are incredibly adept at working collaboratively with many different creative, digital and content partners. In most cases they work across holding companies and with independents alike as the media and channel strategy manager. How many of your creative agencies and the like are as adept at collaboration?

Finally advertisers need to look beyond the media agency as a number cruncher alone. While creative agencies appear to win the major media innovation awards, advertisers need to look for the creativity and innovation within the media agency and bring this to the fore rather than defaulting to one of the many agencies they use for content and implementation to lead their strategic development.

Looking forward to 2015

Lets hope that these trends develop as we move into 2015 and beyond. Moving away from cost to embrace transparency and build trust, with the media agencies further embracing, focusing on performance and transforming the way they do business and their role in the marketing communication process.

Only time will tell.

 

To find our how TrinityP3 Marketing Management Consultants can help you further with this, click here.

An edited version of this was first published in MediaScope 2015 Predictions on December 5, 2015

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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